D.R. Horton turns in strong fourth quarter

National home builder D.R. Horton reported revenue for its fourth fiscal quarter 2012 of $1.3 billion, a 21% increase from $1.1 billion in the same quarter of 2011. Homes closed in the quarter increased 12% to 5,575, compared with 4,987 homes a year ago.

Net income for the fourth quarter, which ended Sept. 30, was $100.1 million, compared with $35.7 million in the fourth quarter of 2011.

Net sales orders for the fourth quarter increased 24% to 5,276 homes from 4,241 homes in the year ago quarter and the value of net sales orders increased 35% to $1.3 billion from $0.9 billion. The Fort Worth, Texas based company’s cancellation rate for the fourth quarter of fiscal 2012 was 27%. Net sales orders for fiscal 2012 increased 21% to 21,048 homes from 17,421 homes in fiscal 2011, and the value of net sales orders increased 29% to $4.8 billion from $3.7 billion.

D.R. Horton’s sales order backlog of homes under contract at Sept. 30, 2012 increased 49% to 7,240 homes from 4,854 homes at Sept. 30, 2011. The value of the backlog increased 61% to $1.7 billion at Sept. 30, 2012 from $1.0 billion a year ago.

For the fiscal year 2012, net income increased to $956.3 million, which included a tax benefit of $713.4 million, primarily due to a reduction of the company’s valuation allowance for its deferred tax asset. Net income for fiscal 2011 was $71.8 million, which included a tax benefit of $59.7 million. Home-building revenue for fiscal 2012 increased 19% to $4.2 billion from $3.5 billion in fiscal 2011. Homes closed in fiscal 2012 increased 13% to 18,890 homes, compared with 16,695 homes in fiscal 2011.

Donald R. Horton, chairman of the board, said in a prepared statement: “Our fiscal 2012 financial results reflect continued improvement in the housing market and in our company’s performance.As our operating metrics and demand for homes in most of our markets have improved, we have increased our investments in homes, finished lots, land and land development. Our increased investments include the acquisition of the home-building assets of Breland Homes during the quarter.

“We are positioned for a strong start to fiscal 2013, with our highest year-end backlog since fiscal 2007. We have continued to see strong sales demand through October and into November. With 13,000 homes in inventory and 60,000 finished lots controlled, we have the home and lot position to continue to grow our market share and meet increasing customer demand.”

Building industry analyst Alex Barron of the Housing Research Center, interviewed in the Wall Street Journal on Nov. 12, noted that D.R. Horton “has cornered the entry-level market,” which makes its homes accessible to more consumers. “They are now starting to expand into some B and C markets earlier than others, which will add to their growth,” Barron said.

D.R. Horton has operations in 77 markets in 26 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the U.S.Based on its 18,890 homes closed during its fiscal year ended Sept. 30, 2012, the company is claiming the title of “the largest homebuilder in the United States.”